AT&T Is Handing Out $1,000 Bonuses To Its Employees After Tax Bill Passes

AT&T CEO Randall Stephenson, left, listens as President Donald Trump speaks during an event at the White House in June. (Photo Credit: AP Photo/Evan Vucci)

AT&T is handing out $1,000 bonuses to 200,000 of its U.S. employees after lawmakers successfully passed tax reform on Wednesday.

The Dallas-based telecom company also reiterated its promise to invest $1 billion in the country in 2018 if the bill is signed into law. The sweeping tax reform was approved by Congress this afternoon and will now go to President Donald Trump for his signature.

"Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said AT&T CEO Randall Stephenson in a statement. “This tax reform will drive economic growth and create good-paying jobs."

The company will distribute the special bonus to union-represented, nonmanagement and front-line management employees. It said if the bill is signed before Christmas it will hand out the bonus over the holidays.

AT&T has been a vocal proponent of tax reform, which will lower the corporate tax rate from 35% to 21%. It has said a lower tax rate will help U.S. companies to better compete globally and will drive investment, economic growth and hiring back home.

Meanwhile, AT&T is squaring off with the Justice Department over its $85.4 billion acquisition of Time Warner. The department has filed a lawsuit to block the tie-up, saying it would be bad for consumers and result in higher cable bills. Trump has also called the deal "not good for the country."

AT&T wasn't the only company to waste no time in reacting to the bill. Fifth Third said it would raise its minimum hourly wage to $15 for all employees and hand out $1,000 bonuses to more than 13,500 employees as a result of the new law. Wells Fargo is also raising its minimum wage to $15 an hour. Comcast is giving $1,000 bonuses to more than 100,000 employees and plans to spend over $50 billion in the next five years investing in infrastructure. Boeing announced it would move forward with $300 million in charitable giving and investments for its employees.

The lower rate will "unleash economic energy" in the U.S., said Boeing CEO Dennis Muilenburg, who called tax reform the "single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country."

Still, there's plenty of skepticism about how companies will use their savings. For instance, in 2004, Congress gave companies a tax break to bring cash back to the U.S. that they had earned overseas, yet businesses by and large went out and bought back their own stock and increased dividends.

In a recent survey by Bank of America Merrill Lynch, the most common way that companies said they would spend repatriated earnings was to pay down debt and buy back shares. Capital investment was further down the list.

Others have rejected the notion that they need to wait for tax reform to roll around to invest in employees. Intel, for instance, doesn't plan to flinch. "You wouldn’t want me to have to have a tax cut in order for me to treat my employees the way I should," Intel CEO Brian Krzanich recently told Forbes.